Dairy Product Donation Program
Also newly introduced with the new farm bill, the Dairy Product Donation Program (DPDP) requires the Secretary of Agriculture to implement a dairy donation program whenever the ADPM is below $4 per hundredweight in each of two consecutive months.
"Should this program commence, the USDA would purchase various dairy products at market prices for distribution to food banks and other donation programs. USDA is prohibited from storing these products and the organizations receiving dairy donations cannot sell the items into commercial markets," Dillivan said.
He explained that as one of the main features of new dairy policy in the 2014 Farm Bill, MPP is a safety net program that provides participating producers with indemnity payments when actual dairy margins fall below levels of coverage that producers select on an annual basis.
"These dairy margins are calculated by national milk prices minus feed costs. Producers pay premiums that are based on the level of coverage selected and individual dairy milk production level," he said.